Steve Blank has an additional screen for opportunity – the “Type of Market” Three types of markets Each with a radically different set of needs Palm in 1995 created a “New Market” Handspring in 2000 with the exact same product, entered an “Existing Market Microsoft with the Pocket PC, is attempting to “Resegment” the Market Why does this matter in weighing and assessing opportunity?

Each “type of market” is radically different Different ways to size the market opportunity Different sales costs Different demand creation costs Different time to liquidity Very different capital requirements And as we’ll see market type choices radically effect the Customer Development process.

In looking at how companies succeed and fail, their success tends to be organized around groupings of customers and markets. More importantly it is how these groupings of customers view their needs and how your new product satisfies those needs

IMVU started life as an “IM add-on” product. It sounded like a brilliant strategy – on a whiteboard.

What’s A Startup? Scalable Startup
Large Company Transition <ul><li>Business Model found </li></ul><ul><li>i.e. Product/Market fit </li></ul><ul><li>- Repeatable sales model </li></ul><ul><li>- Managers hired </li></ul>A Startup is the organization used to search for a scalable business model

The Search for a Business
Model <ul><li>No Business Plan survives first contact with customers </li></ul><ul><li>A Business Model diagrams how a company creates, delivers and captures value </li></ul><ul><li>Or in English: How a company makes money </li></ul>

Customer Creation Big Ideas <ul><li>Grow
customers from few to many </li></ul><ul><li>Positioning </li></ul><ul><li>Launch </li></ul><ul><li>Demand creation </li></ul><ul><li>Different for each of the Market Types </li></ul>

Product Introduction Conundrum <ul><li>Product introductions
aren’t predictable </li></ul><ul><ul><li>Why? </li></ul></ul><ul><ul><li>Is it the people that are different? </li></ul></ul><ul><ul><li>Is it the product that are different? </li></ul></ul><ul><li>Are there different “types” of startups ? </li></ul>

Three Types of Markets <ul><li>Type
of Market changes EVERYTHING </li></ul><ul><li>Sales, marketing and business development differ radically by market type </li></ul>Existing Market Resegmented Market New Market